Contract Manufacturing:
Make Sure You Contract with the Right Party
American companies seeking contract manufacturers in China should contract with a firm that has an experienced staff of sourcing agents, engineers, in-house quality control department and sufficient financial resource in order to avoid costly blunders.
Chinese contract manufacturers provide engineering and manufacturing services to companies and brands that do not operate their own factories. Contract Manufacturing in China provides a variable cost solution for new product startups and cost savings initiatives without the upfront investment in plants, property, equipment and human resources.
- Always deal with full service project management firms that have an established, large network of manufacturers that can fulfill virtually any product in any industry. The benefits of working with a U.S. based project management firm are: Quick turnaround time for quotations
- Operate in U.S. timezones
- Provide real-time updates for tracking data
- Expedite all client orders ensuring a smooth transition from placement of orders to deliveries
- Avoid inconveniences and complexities of dealing directly with factories overseas.
This simple principle is often overlooked when U.S. buyers contract with third-party sourcing companies who lack experience in their industries. When a product defect is discovered, U.S. buyers are limited in their legal recourse options. Sometimes contracting parties may be a CM’s holding company in Hong Kong, Taiwan or Singapore.
Due diligence is crucial to be sure the party you are paying is not a shell entity with little or no assets.
Many Chinese companies are not registered under official English names adding to the complexities of purchasing from Chinese factories.
Working with a full-service project management firm provides the ability to have “feet on the street,” ensuring on-time deliveries of quality products made to accurate specifications.
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